Zhongyin Microelectronics: The actual controller couple takes a high salary but still sells shares at a low price for cashing out IP licensing income slashed, accounting for a shrinking proportion to single digits, losses widened, and cash flow deteriorated

Produced by: Sina Finance Listed Company Research Institute

Author: Zhu

On March 29, Zhongyin Microelectronics (Beijing) Co., Ltd. (hereinafter referred to as “Zhongyin Microelectronics” or “the Company”) submitted its initial listing application to the Main Board of the Hong Kong Stock Exchange for the first time, with Ping An Securities (Hong Kong) serving as the sole sponsor.

On the eve of the filing, multiple shareholders of Zhongyin Microelectronics reduced their holdings at prices significantly below the transaction price of the same period’s Series C financing, cashing out. Among them, the actual controller Wang Hongpeng cashed out 5 million yuan. Interestingly, over the past three years, the actual controller couple received a “sky-high salary” totaling 13.67M yuan, which by common sense should mean they are not short of money.

Behind the concentrated share reduction and cashing out by shareholders, Zhongyin Microelectronics faces an intensifying “revenue growth without profit growth” phenomenon in 2025, with gross profit margin dropping over 18 percentage points, net losses expanding 2.4 times year-on-year, and worsening operating cash flow, with net outflows increasing by 23.2% year-on-year. Especially, revenue from high-margin, high-barrier IP licensing business was halved year-on-year, shrinking to 9% of total revenue.

Actual controller couple still cashing out at low prices despite high salaries

Founded in 2021, Zhongyin Microelectronics is an innovative high-tech company focused on R&D of AI ASIC chip technology platforms. It mainly provides customized chips for AI cloud, edge, terminal, and enterprise-level applications, offering advanced process ASIC design services, 2.5D/3D advanced packaging design, as well as wafer fabrication, mass production support, and other one-stop chip technical services.

Before the IPO, Zhongyin Microelectronics completed seven rounds of financing, raising a total of 796 million yuan, attracting well-known investors such as cornerstone capital, Hillhouse Ventures, Zhangjiang Hi-Tech, Shenzhen Capital Group, Linghua Microelectronics, among others, with a post-investment valuation of about 3.78M yuan.

Founder Wang Hongpeng directly or indirectly controls 54.85% of the company’s shares, making him the controlling shareholder and actual controller; at the board level, Wang Hongpeng serves as Chairman, CEO, and Executive Director, while his spouse Zhang Dongqing is an Executive Director, Employee Director, and General Manager.

It is worth noting that, just before the listing, during the Series C financing period, multiple shareholders cashed out and exited.

From December 2025 to January 2026, Linghua Microelectronics, Zhangjiang Suixin, Tibet Jinyuan, former Executive Director Jiang Guosheng, Yangtze Blockchain, Actual Controller Wang Hongpeng, and Tietou Jushui cashed out via share transfers of 10 million yuan, 31.0918 million yuan, 10.4828 million yuan, 1.6936 million yuan, 15 million yuan, 5 million yuan, and 8.1808 million yuan respectively. After the share transfers, Zhangjiang Suixin and Tibet Jinyuan ceased to be shareholders.

Calculations show that the average transaction price for these share transfers was around 102 yuan per share, significantly below the Series C financing subscription cost of 156.8 yuan per share, with a discount of 35%.

What is puzzling is that Wang Hongpeng holds multiple roles—Chairman, CEO, and Executive Director—and receives substantial annual compensation, so logically he should not be short of money. Why would he sell shares at a low price just before the company files? Could there be potential interests transfer or related-party transactions involved?

According to the prospectus, from 2023 to 2025, Wang Hongpeng’s annual salary (excluding share-based payments) was 3.58M yuan, 2.28M yuan, and 2.282 million yuan respectively, totaling 9.64M yuan over three years; his spouse Zhang Dongqing’s annual salary was 1.27M yuan, 1.14M yuan, and 1.62M yuan, totaling 4.03M yuan. Thus, over the past three years, the controlling couple’s total salary income alone reached 13.67M yuan.

Meanwhile, the domestic AI ASIC leader Chipone Technology’s Chairman and President Dai Weimin’s annual salaries were 5.2947 million yuan, 4.6386 million yuan, and 4.8055 million yuan, totaling 14.7388 million yuan, only slightly higher than the total salary of Zhongyin’s controlling couple. In 2025, Zhongyin’s revenue scale was less than half of Chipone’s.

Source: China Securities Industry Association

More intriguingly, each share transfer transaction involved the presence of Yinglingxinwei. This fund was established on December 11, 2025, and completed filing on January 9, 2026, coinciding exactly with the timing of the aforementioned share transfers. It is clear that its purpose was to invest in Zhongyin Microelectronics.

According to the public information from the China Securities Industry Association, Yinglingxinwei’s manager is Hunan Linghong Private Equity Fund Management Co., Ltd., which was ordered to rectify by the Hunan Securities Regulatory Bureau on July 4, 2025. Additionally, several of its funds have failed to disclose annual reports on time.

Source: Hunan Securities Regulatory Bureau

Investigation shows that Hunan Linghong engaged in violations during its private equity fund management activities: urging investors to make payments, contacting investors during cooling-off periods, assisting investors in filling out suitability assessment forms; failing to promptly inform investors of major fund matters and report to the China Securities Investment Fund Industry Association.

Gross profit margin plummets, net losses expand

Zhongyin Microelectronics’s business model centers on one-stop customized services, providing clients with full-process services from chip definition, design, wafer fabrication, packaging and testing, to final delivery, essentially a project-based business model.

This model results in three main characteristics: first, revenue is highly dependent on a few major projects, with phased delivery causing significant performance fluctuations; second, wafer fabrication and packaging/testing involve rigid costs, resembling a heavy-asset operation with light design; third, customer customization leads to large differences in requirements, low reuse of technology and solutions, and difficulty in achieving scale effects.

From 2023 to 2025, Zhongyin’s only overlapping customer was Customer A, contributing revenues of 9.68M yuan, 283 million yuan, and 181 million yuan, accounting for 12.9%, 81.5%, and 37.4% of total revenue respectively, with sharp fluctuations.

Additionally, in 2024, the company established a business relationship with Customer H, generating 10.02M yuan in revenue that year; in 2025, Customer H became the second-largest customer, with revenue soaring 10.5 times year-on-year to 115 million yuan, mainly due to project delivery revenue, but whether this can be sustained remains to be seen.

Looking at recent financial data, Zhongyin’s revenue experienced explosive growth but has significantly slowed, with gross profit margin dropping sharply and net losses expanding, indicating weakened growth quality.

From 2023 to 2025, revenues were 74.8M yuan, 348 million yuan, and 484 million yuan respectively, with 2024’s YoY growth reaching 364.63%, but growth sharply decelerated to 39.31% in 2025, showing a clear slowdown.

Structurally, in 2024, revenue growth was mainly driven by chip design business; in 2025, the focus shifted to chip delivery volume, but both chip design and IP licensing revenues declined YoY, reflecting an unstable revenue structure dependent on project cycles. More critically, the contract liabilities reflecting order backlog shrank significantly. By the end of 2025, contract liabilities were 192 million yuan, down 40% from the previous year, while at the end of 2023 and 2024, they exceeded 320 million yuan.

On the profitability side, Zhongyin continued to incur large losses, with net losses of 98.43 million yuan, 48.46M yuan, and 164 million yuan from 2023 to 2025, with 2025’s loss notably larger. By the end of 2025, accumulated losses reached 342 million yuan.

Further, the high revenue growth in 2025 mainly resulted from projects entering the delivery phase, with chip delivery revenue surging YoY. However, delivery involves high wafer fabrication, packaging/testing, and foundry costs, directly causing a cliff-like drop in overall gross profit margin, from 46.1% in 2024 to 27.7% in 2025, a decline of over 18 percentage points in a single year, severely squeezing profit margins.

Another pressure from the expanding net loss is rigid cost growth. In 2025, the company’s selling, management, and R&D expenses increased by 135.38%, 20.42%, and 36.17% YoY respectively, totaling 65% of revenue, roughly unchanged from 2024. Over the past three years, the company invested over 500 million yuan in R&D, but with low conversion efficiency.

Industry insiders point out that IP licensing is essentially a business model where chip design companies license their self-developed, verified processor, interface, and controller modules (IP cores) to other chip design firms in exchange for licensing fees and royalties. It is a high-value, light-asset, high-barrier segment upstream in the chip industry chain. Zhongyin claims to have design capabilities covering 7nm to 3nm process nodes, but its IP licensing revenue in 2025 plummeted 53.21% YoY to 43.37M yuan, with revenue share shrinking to 9%.

The halving of IP licensing revenue means the company cannot rely on scaled licensing of intellectual property to dilute R&D costs; each order requires substantial customized development resources. Compared to peers, Chipone’s 2025 IP licensing revenue (including licensing fees and royalties) grew 6.28% YoY, accounting for over 20% of total revenue, with patent licensing fees maintaining a gross margin of 100%, and IP licensing fees above 85%. Zhongyin’s gross margin in this segment is less stable, having dropped to 66.3% in 2024, with weak technological barriers and bargaining power.

More concerning is that Zhongyin’s operating cash flow continues to deteriorate, with net outflows of 129M yuan in 2024 and 158M yuan in 2025. The project-based business’s inherent advance payments, combined with lack of bargaining power (all payments to the top five suppliers are prepayments), cause the company to continuously deplete cash reserves during expansion. As of the end of 2025, prepayments totaled 188 million yuan, accounting for over 40% of total assets, while Chipone’s prepayments accounted for only 6.05%.